(EVs) are out to take over the market. More manufacturers are jumping on the EV trend, meaning that not only are more electric vehicle options available, but they’re becoming more affordable.

If you’re looking at a Tesla though, you’ll see higher prices than before. According to

Reuters

, Tesla has increased their prices in the United States while prices in China are unaffected.

Tesla might be a big name in the U.S., but they’re still facing stiff competition overseas. | Courtesy of Tesla, Inc.

Why Tesla prices in America are going up

Tesla is viewed as one of the brands that made electric cars popular, and because of this, they are doing very well in America.

The biggest name in electric vehicles, Tesla is known for their luxury Model S sedan and more affordable Model 3. With their increasing presence, they are seeing record profits.

However, Tesla price increases are also common at the moment. For example, their popular compact SUV, the Model Y, has had six price hikes in the United States this year. Right now in the U.S., the Model Y has a standard price of $53,990, that's $5,500 more than at the start of the year.

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Why Tesla prices in China are staying the same

MORE: Is Nio 1 of Tesla's Biggest Competitors?

Tesla is the king of the EV market in the U.S., while China has the largest EV market in the world. So in order to make a mark overseas, they have to compete with Chinese manufacturers.

Domestic Chinese electric vehicles have made a splash in the Chinese market. Names like Nio and

Xpeng

are the biggest brands of electric vehicles there, despite Tesla’s plant in China.

A Tesla can cost as much as three times more than a Chinese EV, so even if they have name recognition, they need something else.

Tesla has needed to keep their prices down in China to remain competitive, so they have introduced more affordable variants of their vehicles specifically for the Chinese market.

Chip shortages are to blame

MORE:

EV Sales Are Growing This Year, Despite the Microchip Shortage

For the American market, though, Tesla prices may continue to climb indefinitely. One of the main issues Tesla and other manufacturers in the U.S. face is the

chip shortage

Tesla CEO Elon Musk has pointed to the current chip shortage as one of the company's biggest struggles right now. To keep up with vehicle production, they have had to turn to different chips, which increased production costs.

Musk is hopeful that this chip shortage will subside soon as the effects of the pandemic on the market decline.

Regardless, Americans interested in buying a Tesla may still be frustrated at the price increases, especially if they see that Chinese Tesla prices haven’t changed. Experts have pointed out that Tesla kept the prices of their vehicles down when they first came out in the U.S.

While the prices of Teslas and other vehicles may be on the rise, your insurance doesn’t have to be. In fact, it could actually get lower!

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is here to compare car insurance quotes to find coverage that fits your budget. It only takes 45 seconds to sign up, and Jerry will get to work for you.

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Written By

Serena Aburahma · Expert Insurance Writer

Serena has a BA in Honors English Literature from California State University, Northridge. She has worked as an editor and writer for several years and has had various forms of content published in magazines, websites, anthologies, and more. Serena calls herself a modern "Renaissance woman" since she has a hunger for learning and strives to succeed in many fields. During her free time Serena enjoys acting, singing off-key to songs in the car, and working on her novel.

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